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Second. The definition of those whole dealings may be licensed because such dealings relate to interstate or foreign commerce has been broadened to include not only those engaged in handling agricultural commodities and products thereof in the current of interstate or foreign commerce but also those whose dealings are in competition with or burden, obstruct, or in any way affect such commerce. It is, of course, not intended to authorize the licensing of persons handling goods only in intrastate commerce except where such handling burdens, obstructs, or affects interstate commerce. The language contained in the amendments will, however, make it clear that the full extent of the Federal power over interstate commerce is intended to be vested in the Secretary in connection with the issuance of licenses to processors, associations of producers, and handlers.

Third. The provision of the present law authorizing licenses to eliminate unfair practices and charges is retained, subject to the provisions applicable to all licenses set forth hereinafter. These licenses are called “clause (1) licenses" herein. These licenses may be issued without regard to the provisions which are applicable solely to other licenses, such as the provision requiring a signed marketing agreement in the case of clause (2) licenses and the provision requiring farmer approval in the case of clause (3) licenses.

Fourth. The new provision adds to the present law a new class of licenses, herein called “clause (2) licenses." These licenses are to be issued to make effective a marketing plan set forth in a marketing agreement which relates to any agricultural commodity or product thereof and which is signed by the handlers of 50 percent or more of the volume of business done by the respective classes of business or industrial activity specified in the license.

Fifth. The new provision adds to the present law a second new class of licenses herein called “clause (3) licenses." These licenses may be issued only to make effective a marketing plan set forth in a proposed marketing agreement on which a hearing has been held. They cannot apply to any basic agricultural commodity (or its products), as now defined, except that they can apply to milk and its products, tobacco, and sugar beets and sugarcane. They may be issued only after certain determinations are made by the Secretary with the approval of the President. There must be a determination that the failure or refusal to sign of persons handling more than 50 percent of the volume of business specified in the agreement tends to prevent the effectuation of the declared policy of the act. It must be found that the issuance of such a license is the only practical means of advancing the interests of the farmers producing the commodity. Finally, it must be found that two-thirds of the farmers producing the commodity for market, or the farmers producing for marketing two-thirds of the volume of the commodity, approve or favor the license. Provision is made under which regional licenses will be issued instead of national licenses, so far as practicable, and under which licenses will give due recognition to differences in production and marketing, or both, in different cases. No such clause (3) license can be applicable

3 to a retailer in his capacity as retailer.

Sixth. No license issued under the title (clause (1), clause (2), and clause (3) licenses) can be applicable to a producer in his capacity as producer

a

Seventh. The penalty for violation of a license has been changed from

а a requirement that the license be suspended or revoked to a fine of not less than $50 nor more than $500 for each violation, and each day is to be a separate offense.

Eighth. Specific provision is made for review of licenses. No similar provision is contained in the present act. It is provided that any licensee may file a petition with the Secretary of Agriculture alleging that any provision of a license or any obligation imposed in connection with the license is not in accordance with law. After holding a hearing upon the petition, the Secretary is to make an order with reference to the validity or invalidity of the license in its application to the petitioner, which shall be final if in accordance with law. The petitioner may then, if he desires, file a bill in equity in the Federal courts in order to obtain a review of the Secretary's order, and, if the courts finally determine that the order is not in accordance with law, the proceedings are to be remanded to the Secretary with directions to enter such order or take such further proceedings as, in the opinion of the court, are required by law. During the period while any such petition is pending before the Secretary and for 5 days thereafter, the penalties imposed by the act for violation of the license cannot be imposed upon the petitioner, but the Secretary may, nevertheless, during this period proceed to obtain an injunction against the petitioner pursuant to section 8a (6) of the Agricultural Adjustment Act. It is thought that these provisions establish an equitable and expeditious procedure for testing the validity of licenses, without hampering the Government's power to enforce compliance with their terms.

Section 5 adds to the present law a new subsection enabling the Secretary to secure information with respect to the operation of marketing agreements and licenses. Parties to marketing agreements and licenses are required, on request of the Secretary, to furnish him with information he finds necessary to determine the extent to which the agreement or license has been carried out or has effectuated the policy of the act and with information to enable him to determine if there has been abuse of the privilege of antitrust exemptions. To ascertain the correctness of a report furnished, or to secure the information when not furnished, the Secretary may examine books, records, etc., which he deems relevant. He may examine such data if it is within the control of the person from whom requested or within the control of any person having actual or legal control of the person from whom requested, or any subsidiary of any person from whom requested, or of any subsidiary of the person controlling the person from whom the information is requested. The information secured is required to be kept confidential by persons in the Department of Agriculture. So much of it as the Secretary deems relevant may be disclosed in a suit or administrative hearing to which the Secretary is a party if the suit or hearing involves the agreement or license with respect to which the information was furnished or acquired. General statements may be issued which do not identify the information furnished by any person and, by direction of the Secretary, the name of any person violating an agreement or license together with the provision violated may be issued. Officers or employees of the Department violating ine subsection are subject to fine and imprisonment and removal from office,

Section 6 adds a new subsection (6) to sectior 8 of the Agricultural Adjustment Act which relates to the termination of licenses and marketing agreements. Whenever the Secretary determines that a license or any provision thereof obstructs or does not tend to effectuate the declared policy, he is to terminate or suspend such license or provision. The Secretary is required to terminate a marketing agreement or license whenever he finds that a majority of the farmers producing the commodity during a representative period determined by him who, during such period, have produced for market more than 50 percent of the volume of the commodity favor its termination. In the latter case the termination is effective at the end of the current marketing period fixed in the agreement or license. To be effective, however, such termination must be announced on or before an announcement date fixed in the agreement or license.

Section 6 also adds a new subsection (7) to section 8 of the Agricultural Adjustment Act. The new subsection authorizes the Secretary to use as a base period, for the purposes of any marketing agreement or license, the post-war period (August 1919 to July 1929) or all that portion thereof for which the Secretary can satisfactorily determine the purchasing power of a commodity from available statistics of the Department if he finds and proclaims that as to that commodity the purchasing power during the prewar period cannot be satisfactorily determined from available statistics of the Department.

Section 7 specifically authorizes the Secretary, or an officer of the Department designated by him, to institute an investigation and to conduct a hearing in order to determine the facts with respect to a violation of a license for the purpose of referring the matter to the Attorney General. By the force of section 10 (h) the Secretary can, in connection with such investigation and hearing, exercise the same powers subject to the same limitations as in the case of similar proceedings before the Federal Trade Commission. Notice is required to be given the licensee prior to the hearing.

Section 8 (a) amends the section of the Agricultural Adjustment Act (sec. 9) which provides that when the Secretary determines that rental or benefit payments are to be made a processing tax is imposed. This amendment provides that when the Secretary determines that payments for expansion of domestic or foreign markets of a basic agricultural commodity are to be made, a processing tax shall be in effect with respect to such commodity from the beginning of the marketing year next following the proclamation. The effect of the amendment is to add the expansion of domestic and foreign markets as a purpose for which a processing tax may be levied and also to authorize the imposition of a processing tax to enable the making of both rental or benefit payments and payments for expansion of markets.

Section 8 (b) amends section 9 (a) of the Agricultural Adjustment Act so as to terminate the processing tax levied to make payments for the expansion of markets at the end of the marketing year current at the time of the proclamation that such payments are to be terminated. The subsection also provides that if both rental and benefit payments and payments for expansion of markets are in effect the tax terminates at the end of the marketing year only if the Secretary proclaims that both such payments are to be discontinued. The amendments made by this subsection have no effect on the present law in a case in which rental or benefit payments alone are to be made.

Section 9 amends the provision of the Agricultural Adjustment Act which fixes the rate of the processing tax at an amount which equals the difference between the current average farm price and the fair exchange value of the commodity. The amendment made by this section increases the rate of the processing tax to meke up for the amount of tax lost because the tax is credited or refunded if the processed article is used for charitable or welfare purposes or because the processing is tax exempt. The increased amount of processing tax under this amendment cannot exceed 20 percent of the difference between the current average farm price and the fair exchange value. The amendment is not to affect processing taxes which are effective at the time the bill is enacted, and they are not required to be adjusted or altered unless the Secretary finds that such adjustment or alteration is necessary in order to effectuate the declared policy of the act.

Section 10 amends the provision of the Agricultural Adjustinent Act (sec. 9 (c)) which defines “parity price” to add to it a provision which requires, in the case of commodities the base period for which is August 1909 to July 1914, a parity price which will also reflect comparative interest payments per acre on farm indebtedness and tax payments per acre on farm real estate. Rates of tax in effect on the date the bill is enacted are not to be required to be readjusted as the result of the proposed amendment unless the Secretary of Agriculture finds it necessary to adjust such rates pursuant to section 9 (a). (See also sec. 1 (a).)

Section 11 adds a provision to section 10 (b) of the Agricultural Adjustment Act which authorizes the Secretary of Agriculture to utilize the services of State and local committees and associations of producers. The amendments permit the Secretary to utilize the cooperative associations of producers in connection with the distribution of payments for expansion of domestic or foreign markets. This section of the bill also requires the Secretary to accord such recognition and encouragement to cooperative associations owned or controlled by producers as will be in harmony with the policy toward them set forth in existing acts of Congress and will tend to promote efficient methods of marketing and distribution. It is not intended by this language to discriminate against other handlers, processors, or dealers, but it has been found from experience that the participation by local committees and associations of producers has been of material value in administering the program.

A new paragraph is added to section 10 (b) which provides that licenses issued under the title shall provide that the licensee shall pay to the authority established under the license that licensee's pro rata share of the expenses incurred by the authority, but no payment is required to be made for any part of the expenses of the authority, incurred in receiving, handling, holding, or disposing of commodities for the benefit of persons other than licensees. The provision also authorizes a suit by the authority in its own name to collect such expenses and authorizes the district courts tu entertain suih suits.

Section 12 amends section 10 (e) of the Agricultural Adjustment Act which provides that neither the determination of the amount of, nor the meking of, any rental or benefit payment is subject to the review of any governmental officer except the Secretary of Agriculture and the Secretary of the Treasury by extending the provision to apply to the determination and making of payments for expansion of domestic or foreign markets.

Section 13 specifically authorizes the use of the $100,000,000 fund appropriated under section 12 (a) of the Agricultural Adjustment Act for payments for expansion of domestic or foreign markets. This provision is complementary to the provisions of section 3 (b) of the bill which authorize payments out of processing tax receipts for such purposes.

Section 14 adds a new subsection to section 12 of the Agricultural Adjustment Act. This provision authorizes an additional appropriation for each fiscal year of an amount equal to 30 percent of the gross customs receipts during the preceding year ending December 31. Amounts which may be appropriated under this subsection are to be maintained in a separate fund. The fund may be used for three major purposes. The first is the encouragement of exportation of agricultural commodities by the payment of benefits in connection with their exportation or indemnifying for losses incurred in connection with exportation and by payments to producers in connection with the production of that part of the production of any agricultural commodity required for domestic consumption. The second use is the purchase or lease, on behalf of the United States, of submarginal agricultural and grazing lands. The third use to which such sums may be put is the making of payments (which for the purposes of the act are not considered rental or benefit payments and hence do not require the levy of a processing tax as a condition of their payment) in connection with acreage or production adjustment of basic agricultural commodities. The Secretary is to expend the amounts as he deems will best effectuate the policy of restoring agricultural purchasing power as contemplated by the Agricultural Adjustment Act consistently with the fullest utilization of the productive capacity of land which can be profitably cultivated and with the most rapid expansion of agricultural exports.

Section 15 adds a new subsection to section 12 of the Agricultural Adjustment Act which provides that the amounts expended for pansion of domestic and foreign markets, removal of surpluses, administrative expenses, and rental and benefit payments in connection with any basic agricultural commodity shall not be less than the amount of the taxes levied under the act with respect to that commodity. For the purpose of the calculations required under this provision, amounts collected and expended from taxes which are held for or paid for use in, any possession are not to be included, refunds and abatements of taxes are not to be included, and hogs and field corn may be considered a single commodity.

Section 16 amends the provision of section 15 of the Agricultural Adiustment Act which authorizes the Secretary to ascertain whether the payment of processing taxes upon any basic agricultural commodity is causing or will cause the processors thereof disadvantages in competition from any competing commodity by reason of excessive shifts in consumption. The Secretary is then authorized to specify the competing commodity and thereupon a compensating tax is imposed on the processing of that competing commodity which will prevent such disadvantages in competition. The effect of the amend

H. Repts., 74-1, vol. 2-36

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